The Income Tax Dept Is Investigating Close To 5 Lakh People That Regularly Trade in Bitcoins

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For anyone who thought trading in Bitcoin was a super quick get rich scheme, don’t think you were going to have your cake and eat it too, courtesy of the Income Tax department.

The Income Tax department isn’t too keen on all this Bitcoin hype it seems, as it issues notices to between four to five lakh high net worth (HNI) people across India that were trading in the cryptocurrency. It’s not like there weren’t any signs of government scrutiny. The RBI had issued seven guidelines, warning people against investing in Bitcoins.

The IT department had conducted surveys across these virtual currency trading exchanges last week, as part of its investigation into instances of tax evasion. According to its report, the department found an estimated 20 lakh entities registered on these exchanges, with between four to five lakh of them being highly active.

Inside sources told PTI that the investigative wing of the department based in Bengaluru, which conducted the probe last week, has now transmitted the data they recovered on these individuals and groups on the exchange to other similar bodies across India. “Those individuals and entities whose records were recovered by the department are now being probed under tax evasion charges. Notices are being issued and they will have to pay capital gains tax on the bitcoin investments and trade,” a senior official privy to the operation said.

ALSO READ: Everything You Need To Know About Bitcoin, Now That It’s Surged Past $10,000 Per Coin

The notices issued are firstly demanding financial details regarding the Bitcoin transactions from the Indian parties involved, and will then look to establish just how much needs to be paid in back taxes. As of right now, there are no laws or regulations regarding the trade of Bitcoin or other cryptocurrencies in India, so the IT department is working based on existing norms.

This latest move is another fallout of the recent boom in Bitcoin values, which have spiked at an all-time high of $18,933 at the time of writing (Rs 12,14,471). Because of this, the IT department is also looking to preempt any money laundering attempts using Bitcoin, given both its value and its innate anonymity.

So far, the Reserve Bank of India (RBI) has also cautioned both the public and the commercial sector that it does not recognise the cryptocurrency as legal tender, despite varying degrees of popularity as a transaction medium abroad.

ALSO READ: 7 Things You Should Know About World’s 1st Official Bitcoin Billionaires, The Winklevoss Twins

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